Palestinian workers build settlement home in Kedumim 58 (R).
(photo credit: REUTERS/Nir Elias)
Talk of a slowdown at contractors’ sales offices is becoming grounded in
official figures. The Central Bureau of Statistics has reported a steady drop in
home sales in recent months. Remarks by contractors and developers this week
further highlight the difficulties at their sales offices, and may signal a halt
in the rise in prices.
Roni Mizrachi, owner and CEO of Mizrachi &
Sons Ltd., which has been in business for over 40 years, agrees that buyers are
now waiting, in the belief that prices will likely fall in the not-too-distant
future. He also offers pessimistic forecasts about building retrofitting plans
Mizrachi & Sons is currently building hundreds
of apartments in Haifa, Jerusalem, Tel Aviv, Netanya, Hod Hasharon, and
“We don’t build in the periphery, and we won’t go and build
there,” Mizrachi said.
“Outside the first and second rings in central
Israel, it’s risky. The moment there is a security or economic problem, those
are the places hit first.”
Mizrachi added, “There is now a slowdown in
apartment sales. I believe that it will last through September. There is
uncertainty, too much information about measures of one kind or another, and
people are confused. But in September, everyone will wake up and again start
buying apartments... at the same time, I believe that prices will fall in some
cities. I expect prices to fall by 5-10 percent in Tel Aviv, Yavne, Pardess
Hanna, and Hadera. I expect prices to rise by 3-5% in Hod Hasharon, Rishon
LeZion, Holon, and Jerusalem. Haifa will remain unchanged because there will be
a drop in demand alongside a drop in supply, but Ashkelon and Beersheba will get
hit with the steepest price falls because of the security
Asked by Globes about the secondhand housing market, Mizrachi
said “There is a bubble in the second-hand housing market.
The difference between a new and second-hand apartment
should be around 25%. Current prices do not come near this and are unrealistic.
The second- hand housing market will see a drop in prices of 20-25% within six
months. I’m talking about the center of the country; this market has already
stagnated in the periphery.”
Asked about his current development plan
under these circumstances, Mizrachi said “We made deals until now, but we’ve
stopped. Land prices have peaked, and we should see where the market is headed,
and not take risks. Contractors will now wait, sell what they have, and not
start new projects. Where apartment prices begin to fall, land prices will also
What is your opinion about National Outline Plan 38 -
Earthquake Reinforcement and Retrofitting? “It’s not something I’ll go into. I
don’t believe that it’s possible to add 120 tons onto the roof of a building and
for everything to be fine. This plan is like taking an elderly woman, giving her
a facelift, and saying that she’s young. It’s all cosmetic.
the first building collapses, the entire program will be halted that
And I maintain that it will happen. There are already buildings that
have been retrofitted and are leaning sideways. The solution for urban renewal
is to vacate and build new projects. This maximizes land use, increases the
number of housing units, and improves the current residents’ standard of living.
We’re about to start several vacate-and-building projects in Or Yehuda.”